Brexit and the Labour Market Contents

Chapter 4: The future of the net migration target

106.This final chapter considers the overall objective of immigration policy after Brexit and in particular how the Government can balance any continuing fixed target for net migration with the needs of the UK labour market.

The net migration target

107.The Minister for Immigration told us that the Government is:

“committed to reducing net migration to the tens of thousands, which is 100,000 or less. That has been our position for a considerable time.” 153

108.The Minister made the point that this is a “long-term target” that “will not be achieved in the next two or three years”.154

109.The migration target uses the ONS estimates of long-term net migration. This is the difference between immigration into and emigration from the UK taken from the adjusted International Passenger Survey.155 The definition of migration used for the survey is that preferred by the OECD (that is someone moving to the UK for over 12 months).156 Included in the target, therefore, are those coming to the UK for work or study, or to join family members.

110.Lord Green of Deddington, Chairman of Migration Watch, considered the Government’s approach was justified:

“There is a strong public demand to reduce immigration … On the objective, I would suggest an objective of this kind: a level of net migration that avoids undue pressure on our population, public services and community cohesion. Do we need a target? I would say yes.”157

111.Our 2008 report recognised these arguments and also that large-scale immigration, whilst increasing GDP, did not have the same impact on GDP per person.158

112.The use of net migration as a target caused concern to other witnesses who questioned who was included in the target, and its economic and policy consequences.

Who is included in the target

113.Net migration is a measure of those entering the UK less those leaving the UK. The Government does not have control over all the variables in this target. In particular, the Government cannot control the number of UK passport holders leaving the UK in any given year.

114.A second issue is the treatment of international students. In 2016 136,000 (23 per cent) of those coming into the UK were doing so to study.159

115.The Minister for Immigration argued that the inclusion of students in the target was justified. He considered that this ensured consistency with international statistical norms. He also pointed out that “it does not impact on net migration if students come here, study and then go back to their own country afterwards.”160 He stated that the “vast majority” do return at the end of their course. He argued it is necessary to know how many students are in the UK due to the impact on local services.161

116.A number of other witnesses argued that students should be excluded from the target. Universities UK told us that the “inclusion of international students in the net migration target ignores the widely held view that international students are temporary migrants”.162

117.Universities UK and the University and Colleges Association argued that international students “bring major economic and other benefits to the UK” and created jobs.163 Philippe Legrain of the Institute for Economic Affairs went further:

“Education is now [the UK’s] third biggest export industry. Foreign students who have all the benefits of their foreign perspectives and experience, on top of the fact that they are educated locally, speak English perfectly and know local norms, are the ideal workers whom you want to keep in Britain in order to boost GDP per capita, pay tax for local people and make us all better off.”164

Economic and policy consequences

118.The concern from some economists who gave evidence was primarily that the economic rationale for a set amount of population growth from migration was poor. Professor Portes considered that “trying to put a number on a sustainable level of immigration…is not a sensible way of approaching the issue.”165

119.Philippe Legrain was among the witnesses who highlighted poor policy-making that had resulted from a focus on one part of the immigration data:

“in prioritising an absurd and arbitrary target, [the government] takes[s] stupid and costly decisions without thinking through the consequences. It is madness, at a time when every country in the world is trying to increase its share of the booming global export market, to be clamping down on foreign students, not to mention the impact it has on the good will of Britain in countries such as India. It is immoral to be preventing poorer British people from living in Britain with their foreign spouse. This is like ‘Romeo and Juliet’ against a backdrop of 21st century bureaucracy.”166

120.Finally, due to the large margin of error in the current net migration figures, the Government may never be able to say with certainty that it has “hit the target”. Stephen Clarke of the Resolution Foundation pointed out that “you might think you have got [net migration] down to 99,000, but actually you only had it at 140,000.”167

Ways to improve the target

121.If an objective of a sustainable level of migration remains part of the Government’s approach, the way the target is made up and used could be adapted in the following ways.

Remove students from the net migration figures.

122.Under the OECD preferred definition students coming to study in the UK for more than 12 months are ‘long-term migrants’.168 Some countries such as Canada, Australia and the USA, whilst using the same definition, separate migration into ‘temporary’ and ‘permanent’ categories and count students in the former.169 Stephen Clarke suggested the UK could follow a similar model and separate students from ‘permanent’ net migration so they do not count towards any target.170

123.Even if this approach is adopted, removing student migrants from the figures, in particular for those emigrating, is not straightforward as the available data do not allow for a precise figure of how many students stay at the end of their degree to be calculated (see Box 1 above).171

124.On 13 March 2017, the House of Lords agreed an amendment to the Higher Education and Research Act which would have the effect of removing students from the net migration figures for public policy purposes.172 This amendment was rejected by the Government.173

125.We recommend that the Government expedites measures to accurately assess the number of students who leave the UK at the end of their university education. To monitor the impact on local housing, the Government should also ask universities to provide information on the accommodation provided to international students. Once this information is available students should not be included in in any short-term net migration figures for public policy purposes.

Monitor the number of migrants resident in the UK

126.Professor Robert Rowthorn of the University of Cambridge pointed out that net migration of 285,000 a year “would add 9 million to the population by 2039.”174 One of the reasons given by the Government to justify the target was that “net migration needs to be reduced because of the pressure that it can put on public services—housing...and the health service, education and other services.”175 Figure 5 in Appendix 5 provides details of the distribution of migrants across the UK.

127.In our 2008 report we concluded that immigration “has important economic impacts on public services and education and health”, but “the data available to assess these impacts are very limited”.176 Our 2016 report on the UK housing market concluded that “if immigration remains at current levels, it will be a large factor in the future demand for housing, especially in the London private rental sector”.177

128.The potential pressures on public services from a rising migrant population are not necessarily captured in a target monitoring the flow of people into and out of the UK. Future policy should also pay close attention to areas where there are such concerns arising from increases in the local population. This would enable the Government to provide investment in local services, including health and education, which may be under pressure due to the increased demand.

Breakdown target by sector

129.As set out above, reliance on migrant workers varies across different sectors of the economy. A number of sectors suggested any target or cap on EU migrants should be able to reflect the diverse needs of the labour market. Charlotte Holloway of techUK called for “the creation of a smart migration system that is much more data-driven, to meet real-time economic needs”.178

130.Similarly, in the healthcare sector, the British Medical Association told us that if the Government was to introduce a cap on EU workers, “it would be crucial to ensure that sufficient provision was made for healthcare workers.” The BMA suggested that the system of identifying shortage occupations is not “comprehensive or responsive enough to adequately measure need or take account of future changes in the workforce.”179

Ensure that the target is flexible

131.In evidence to the Committee in September 2016, the Chancellor of the Exchequer suggested that a target would not be used to limit the number of highly skilled workers in some sectors:

“I would expect that using the control, which we will have, over the movement of people in a sensible way will certainly facilitate the movement of highly skilled people between financial institutions and businesses to support investment in the UK economy.”180

132.In March 2017 the Secretary of State for Exiting the European Union told the BBC that he could not “imagine that the policy will be anything other than that which is in the national interest.” He continued and explained that this “means that from time to time we will need more [migrants], from time to time we will need less. That is how it will no doubt work and that will be in everybody’s interests.”181

133.The objective of having migration at sustainable levels is unlikely to be best achieved by the strict use of an annual numerical target for net migration. Instead, such a target runs the risk of causing considerable disruption by failing to allow the UK to respond flexibly to labour market needs and economic conditions, as the Secretary of State for Exiting the European Union has suggested is necessary. The objective of reducing migration to sustainable levels should be implemented flexibly and be able to take account of labour market needs, in particular during the implementation period.

153 Q 61 (Robert Goodwill MP)

154 Q 67 (Robert Goodwill MP)

155 Adjustments made for asylum seekers, non-asylum enforced removals, people resettled in the UK under resettlement schemes, visitor and migrant switchers and flows to and from Northern Ireland.

156 See Box 1.

157 Q 15 (Lord Green of Deddington)

158 Select Committee on Economic Affairs, The Economic Impact of Immigration (1st Report, Session 2007–08, HL Paper 82–I)

160 Q 61 (Robert Goodwill MP)

161 QQ 61–62 (Robert Goodwill MP)

162 Written evidence from Universities UK (LMT0027)

163 Written evidence from Universities UK (LMT0027) and written evidence from the Universities and Colleges Employers Association (LMT0016). Universities UK suggested that up to 170,000 jobs were supported by UK Universities.

164 Q 23 (Philippe Legrain)

165 Q 1 (Prof Jonathan Portes); see also Q 15 (Philippe Legrain).

166 Q 15 (Philippe Legrain); see also written evidence from Universities UK (LMT0027).

167 Q 15 (Stephen Clarke)

168 United Nations Statistics Division, Recommendations on Statistics of International Migration, Revision 1, 1998: [accessed 12 July 2017]. As this is the definition used by the international passenger survey, the number of students come into and out of the UK are included within the net migration figures.

169 IPPR, Destination education: Reforming migration policy on international students to grow the UK’s vital education exports, September 2016: [accessed 12 July 2017]. In 2012 the questions asked by researchers conducting the passenger survey were amended to include a question designed to identify emigrating former students.

170 Q 15 (Stephen Clarke)

171 Q 3 (Prof Alan Manning); see also Q 6 (Prof Robert Rowthorn).

172 Lord Hannay of Chiswick’s amendment provided that “The Secretary of State shall ensure that no student, either undergraduate or postgraduate, who has received an offer to study at such a higher education provider, be treated for public policy purposes as a long-term migrant to the United Kingdom, for the duration of their studies at such an establishment”. HL Deb, 13 March 2017, cols 1668–1692

173 HC Deb, 26 April 2017, col 1185

174 Q 1 (Prof Robert Rowthorn)

175 Q 61 (Robert Goodwill MP)

176 Select Committee on Economic Affairs, The Economic Impact of Immigration, (1st Report, Session 2007–08, HL Paper 82-I)

177 Select Committee on Economic Affairs, Building More Homes, (1st Report, Session 2015–16, HL Paper 20)

178 Q 42 (Charlotte Holloway)

179 Written evidence from the BMA (LMT0023). Details of the shortage occupation system are set out in Appendix 4.

180 Oral evidence taken on 8 September 2016 (Session 2016–17), Q 14 (Philip Hammond MP); Mr Hammond’s expectation is partially reflected in the White Paper which states that the new immigration system should “encourage the brightest and the best to come to this country”. The United Kingdom’s exit from and new partnership with the European Union, op. cit.

181 Mr Davis was appearing on the BBC Question Time. BBC News, ‘Immigration should rise and fall after Brexit David Davis says’, 27 March 2017: [accessed 12 July 2017]

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